The Institute of Internal Auditors Fosters Trust in Governance
(November 2019) – In Lake Mary, known as a hub for financial technology companies, a four-story office building houses the global headquarters of a nonprofit that guides risk management, operational controls and governance for nearly every Fortune 500 company and major government entity in the United States and beyond. When a hurricane sweeps through Florida, a national scandal puts a bank’s reputation at risk, or a cybersecurity breach exposes the customer data of a global retail operation, this professional association is taking note.
The Institute of Internal Auditors has been steadily building its worldwide influence from the Orlando metropolitan area for 48 years. Today, 78 years after it was founded in New York, it has more than 200,000 members in over 200 countries and territories. It employs about 230 people in high-wage jobs in Lake Mary and another 800 at operations around the world along with its global affiliates and chapters.
But many local people don’t know it exists.
“I always say this is one of the best-kept secrets in Central Florida,” said Richard Chambers, a former internal auditor himself who has led the organization as its president and CEO for nearly 11 years. “No other operation in this area has the geographic or business reach we do. What people don’t know about us is that we are the voice of a global profession that has literally a worldwide footprint. We don’t just speak for the people who belong to our organization, but for a profession of millions of internal auditors worldwide.”
The IIA works to keep internal auditors up to date on traditional risks, such as misuse of funds and embezzlement, and a growing number of threats emerging from technology, social media, climate change, politics, evolving social norms and other factors. The organization also works to elevate the profile of internal auditors in their role as stewards of good governance through training, certification and advocacy efforts.
It is not an easy task. When people outside the profession hear the phrase “internal audit,” they tend to think of people working in static jobs in a back office examining financial records, Chambers said. Today’s internal audit is so much more.
“We have an incredibly important mission here,” Chambers said. “We know we’re serving the profession, but we also feel like we’re serving a higher mission. Trust is such a rare commodity in the world today. We feel like we are the beacons for building trust in organizations. We shine light on ways for internal auditors to serve their organizations and foster trust, whether it’s in government or the corporate sector.
“Almost every publicly traded company in this country has an internal audit function. Those internal auditors are working every day behind the scenes to make sure the risks are managed in the company, that it’s well-controlled and there’s no fraud or corruption.”
A Big Move
A wall of fame in a conference room shows The IIA’s leaders dating back to the year the association was founded in 1941. Chambers likes to point to that wall and tell the story of how one of his predecessors brought the association’s headquarters to Central Florida.
John Harmon had been working in association management for some time. Unlike other IIA CEOs before and since, he was not an internal auditor. The IIA was interested in recruiting him to grow the organization.
Harmon had just walked into his house after playing tennis when the call came in offering him the CEO position. He said he would think about it, but only if the board of directors would agree to move the headquarters from New York to Winter Park, where the association already had a small office. He got his wish.
During his tenure from 1972 until 1978, Harmon persuaded the board to buy a two-building property on Maitland Avenue in Altamonte Springs. The association moved into one building and leased out the other, using the income to help it turn the corner toward financial stability.
The IIA constructed new buildings on that site in 2002 and then outgrew them, eventually moving to its current site in 2017. Today, the Lake Mary headquarters houses teams that oversee the global organization as well as its North American operations, which include more than 160 membership chapters in Canada, the U.S. and the Caribbean.
The teams in Lake Mary administer an exam for the certified internal auditor or CIA designation in 15 languages worldwide. They maintain The International Standards for the Professional Practice of Internal Auditing, the only global set of standards for the profession, and other key guidance documents. They publish the award-winning Internal Auditor magazine. They organize events, including an annual international conference that will be held in Miami in 2020 and Singapore in 2021.
Chambers attributes much of that work to Harmon’s vision.
“I have modeled a lot of what we’ve tried to do over these last few years after what he did,” Chambers said. “It was such a dynamic period. We launched our Standards, we launched a research foundation, we launched the CIA — all of that in those few years. He brought a bit of business acumen to the association that is tough to get. I view him as one of my heroes.”
Under the watch of Chambers, the association has doubled its membership, revenues and employment numbers
while helping auditors rise to positions in the C-suite.
Internal auditors serve a very different role from that of external auditors like the “Big Four” accounting and audit firms of KPMG, Ernst & Young, PricewaterhouseCoopers and Deloitte.
“It’s about who you’re serving and who you’re providing assurance to,” Chambers said. “External auditors provide assurance to shareholders, lenders and markets. They provide assurance about the accuracy of a company’s financial statements. Internal auditors provide assurance to the board and management about the overall effectiveness of risk management roles inside the organization.”
External audit partners will often be engaged with internal audit, he said. “They want to know, ‘What are the internal auditors finding? And does the company have a strong and effective internal audit function?’ Because if I’m the external auditor, and they don’t have anybody inside the company every day looking at auditing, I’m going to be very nervous.”
Chambers became passionate about internal auditing straight out of college. After his first job, with a bank in Atlanta, he went on to work as director of internal review for the U.S. Army at the Pentagon, deputy inspector general for the U.S. Postal Service and inspector general for the Tennessee Valley Authority. Inspectors general are essentially the internal auditors of the public sector.
“What makes it such a rewarding profession is that you can get into everything,” Chambers said. “For the Army, I would audit everything from accountability for weapons to childcare centers. You never get bored if you can do that kind of work. If you have a routine where you’re doing the same thing every day, year after year after year, it’s hard to keep your interest because it becomes monotonous. But in internal audit, if you have to take on a new risk every two or three months, it keeps you sharp and alert, and a lot of people find it rewarding.”
During his time at the Pentagon, when he needed ideas and strategies for taking the organization through a transformation initiative, he discovered The IIA.
He was hooked. He began volunteering with the association and moved his way up into positions that got him noticed. He took early retirement from the Tennessee Valley Authority and joined The IIA staff for three years as its vice president of learning centers. After a stint as a practice leader for PricewaterhouseCoopers, where he advised chief audit executives from Fortune 500 companies, he returned to The IIA five years later, this time as CEO and president. It was January 2009, and the association had taken a financial hit, watching its membership numbers dip during the Great Recession.
“It was a very, very scary time from the standpoint of the economy,” Chambers said. “The IIA had been through a tough year. I often use the cliché that, if the economy gets a cold, the not-for-profit sector gets the flu.”
Under his reign, the association cut expenses drastically, laid off more than 40 people and got back to what Chambers calls “fighting weight.”
“We were a lean organization committed to serving a profession that desperately needed our support at that time,” he said. “From that moment on, we have been very prosperous.”
Today, the organization has received recognition all over the world. When The IIA celebrated its 75th anniversary, Chambers got to ring the opening bell on the New York Stock Exchange. Chambers and the association’s global advocacy team engage with organizations that include the World Bank, the International Monetary Fund and the Organization for Economic Cooperation and Development. This year, the job has taken Chambers twice to Africa and to Asia, Australia, Europe and India.
He has written three books about the profession, which have been translated into multiple languages. His blog, started a decade ago, has more than 300,000 readers. He has 15,000 followers on LinkedIn and 12,000 on Twitter. But the most surprising part about leading the organization, he said, is when he walks into an association event in Africa or Asia and people want their picture taken with him.
“I never set out to be the face of the profession,” he said. “I’m not the senior person in the internal audit profession — that is the chairman of the board. What I find is that it’s a profession, particularly in developing parts of the world, that is starved for heroes. They want somebody out there they can look to and look up to. … It’s a little bit overwhelming because I never set out to do it. But I think it’s something that’s valuable.”
Chambers sees himself and The IIA as ambassadors for Central Florida. “People around the world have heard of Altamonte Springs and Lake Mary, Florida, because they know that’s where we’re based,” he said. “We’ve always taken great pride in being good corporate citizens. We want to do what we can to support this region because it’s been such a terrific host for us for nearly 50 years.”